This investor explains why Amphenol is an appealing stock

Caldwell Investment Management president and CEO Brendan Caldwell says Amphenol (Amphenol Stock Quote, Chart, News, Analysts, Financials NYSE:APH) may sound highly technical, but its business is built around essential components that quietly power communication across a wide range of industries.

Speaking on BNN Bloomberg Market Call on March 25, Caldwell described Amphenol as a company that enables devices and systems to communicate with each other.

Caldwell said the business is diversified across roughly 140 smaller operating units, each run with a degree of independence that gives the company a more entrepreneurial structure than many large technology firms..

“They allow for the interoperability of communications devices,” he said, adding that in practical terms the company makes connectors, cables and signal-transmission components that convert real-world inputs into usable electronic signals.

Caldwell said the business is diversified across roughly 140 smaller operating units, each run with a degree of independence that gives the company a more entrepreneurial structure than many large technology firms.

The investor said that model has also supported Amphenol’s long-term growth through acquisitions, with the company using a roll-up strategy to buy businesses and then support them with broader scale and resources.

Caldwell added that Amphenol serves a broad customer base across sectors including aerospace, medical devices, defence and computing, essentially anywhere products need to connect and communicate reliably.

“So quite a varied base,” he said.

Amphenol shares have gained 84.75% over the past 12 months and 94.04% over five years. Among analysts covering the stock, 14 rate it “Buy,” five “Hold,” and none “Sell,” with a consensus price target of US$170.50.

The shares closed March 25 at US$128.77.

-30-